LUFKIN, TX (KTRE) - Despite a good report on sales tax revenues from the Texas Comptroller office in Austin, Lufkin and Angelina County officials are bracing for a possible shortfall in revenue because of job cuts at General Electric.
The June report shows sales tax revenue for Lufkin during the month of April was $1,080,330.49. That is up 3.78 percent from the previous month. For the year, Lufkin is up 2.79 percent. Angelina County brought in $415,881.25 to put them up 3.5 percent. However for the year, the county is at -2.17 percent from last year.
Lufkin City Manager Keith Wright said the city is in good standing compared to other cities in the region.
"If you compare us to our counterparts in the region, we are good," Wright said. "Us and Diboll are seeing positive numbers, while Beaumont, Henderson, Japser, Nacogdoches, and Tyler all are seeing negative numbers on the report. Tyler is even down double digits."
Despite the positive gain, County Auditor Eddie Gray is concerned as he begins to look at the budget for net year.
"We will start the budget workshops in the coming weeks," Gray said. "It is something that we really have to watch. Sales tax revenue is one-third of our budget."
Gray is concerned over the large amount of permanent job cuts at several GE facilities in Lufkin. In WARN letters made public by the Texas Workforce Commission, GE is cutting 44 of 82 jobs at the gear repair shop, 213 of 311 jobs at power transmissions and 105 of 122 jobs in the oilfield division. The jobs will be terminated by August 5. These cuts will leave 243 jobs in those three divisions. GE will not confirm how many more jobs are being left in the county.
"As you know, we have multiple facilities in the area and some were not impacted by this announcement," Lindsey Benton, GE external affairs leader said. "There are many factors that determine employment levels, therefore I'm unable to share specific numbers. Although our footprint is changing, we will continue to employ a strong, skilled workforce dedicated to oil field and power transmission technology leadership."
"I cannot say I am surprised by what is going on," Gray said. "This is a business decision they have made, and locally, it is affecting us quiet adversely. It is also jobs that people are not going to be able to get at other places in the county."
Wright said the city is always concerned with manufacturing cuts and has planned already to see a drop off.
"We are looking at a one-percent decline in sales tax," Wright said. "How much of that had to do with oil and gas? I know that had to be an impact, but there are probably other factors we are not aware of."
Gray said the county is also looking at taxes on commercial inventory being a factor as well.
"I think this again goes back to GE," Gray said. "We no longer have that value to appraise the tax on."
Wright said the landscape of the economy is changing in East Texas.
"It is not just Lufkin or Texas," Wright said. "Manufacturing jobs all across the U.S. are closing or leaving. It is a business decision and it is all about the shareholders. "Realistically the large manufacturing is going to be hard to come by. I think the future of manufacturing in Lufkin is going to be 30-60 man shops. I think locally we will be focused on a view of manufacturing, retail and healthcare. I think that is where we will see our revenue come from."
The numbers released in the June report are two months behind. Wright and Gray both said that the full impact will not be known for several months.
The report for all cities and counties can be found here.